Euro Zone break-up may seriously affect VW Golf, Fiat Panda

Article by Christian Andrei, on December 22, 2011

The unraveling of the euro could mean serious troubles for Volkswagen Golf and possible blessings for Fiat Panda. Together, the Golf and the Panda are older than the European Union. Beyond the immediate economic fight, a north-south break-up -- wherein Spain, Greece and Italy left the currency -- would change the industrial map.

This would topple ten years of supply relationships and investment decisions based on monetary union.

Alexander Law, Paris-based head of economics consulting firm Xerfi Global, explained that there will be "no winners among European car makers" once the breakup happens. However, he explained that there are various degrees of "loser," adding that the profitability of domestic production is a major factor.

With the break-up, an emergence of a stronger German currency is anticipated. This will increase domestic production costs and erodes the competitiveness of exports such as the Golf, which was first sold in 1974. On the other hand, Fiat's 31-year-old Panda mini will potentially be more attractively priced abroad as a new lira sagged under Italy's public debt.

Auto analyst Sanford C. Bernstein at Max Warburton explained that the German industry would find itself operating with a re-established deutschmark and its export competitiveness crippled. He cited that a free-floating national currency would be 20-80 percent stronger compared to the rate in 1999 when the country's currency joined the euro.

The new Volkswagen Golf is part of the German carmaker’s strategy to sharpen the brand’s design across all classes. And the reason for that is because all of Volkswagen’s design criteria had been entirely redefined under the direction of Walter de Silva, Head of Volkswagen Group Design.

De Silva went through the process of reinventing the design together with Flavio Manzoni, who is the group director for VW creative design, and Klaus Bischoff, the design chief for Volkswagen brand.

According to de Silva, they have assembled some of the core elements of the past design details, which they termed ‘historical DNA.’ Volkswagen’s successful new designs, like the one that the Golf now carries, take on this historical DNA in order to create a combination of familiarity and new feeling for customers, he explains.

Looking at the new Volkswagen Golf would make you understand what de Silva means by this. The sixth generation does not deviate from the design and styling of previous models, but it essentially remains to be the Golf that consumers have come to know – only better. It remains to be unique, original, timeless, reliable, stable, and class-free, as well as comes with a universal appeal.

Bischoff says that the Golf realizes VW’s formal design language, which creates a totally new sensation in product design. It may be easy to understand, he says, but is very hard to recreate.

The logic behind this design hasn’t been replicated by any of the VW Golf’s class competitors, and they have not matched the car's continuous advanced success and development in over three decades of its existence.

Moreover, Volkswagen Golf’s styling layout follows the Volkswagen historical DNA, as rearranged by de Silva’s team. A high level of value is one key aspect in this, and the new Golf reflects this image par excellence.

As de Silva further explains, they have cast the Volkswagen Golf's essential components in a new and precise mold. He also emphasizes that the Golf is a global icon in car making, and so the new model’s architecture and styling must be absolutely unique and clear.

Topics: vw, vw golf, fiat, fiat panda

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